Independent Auditors’ Report on SBA’s Fiscal Year 2021 Compliance with the Payment Integrity Information Act of 2019

The Payment Integrity Information Act of 2019 requires an annual audit of the Small Business Administration’s (SBA) improper payment reporting. We contracted with the independent certified public accounting firm KPMG LLP to audit SBA’s Fiscal Year 2021 compliance with the Act.

In the report, KPMG auditors found the agency was compliant with 5 of the 10 reporting requirements under the Act and Office of Management and Budget (OMB) guidance.

However, SBA is not in compliance with the Act because

• the agency did not conduct or update the improper payment risk assessment for each program with annual outlays greater than $10 million;
• three of four reported areas did not publish an improper payment and unknown payment reduction target; 
• the Disaster Direct Loan Program did not publish corrective action plans, demonstrate improvement to payment integrity or develop a plan to meet the improper payment and unknown payment reduction target, and 
• the Disaster Direct Loan Program reported a gross improper payments and unknown payments rate exceeding 10 percent, which is the higher than the amount allowed by law

In addition, KPMG found the agency needs to improve the accuracy and appropriateness of improper payment reporting. The agency also needs to improve controls to prevent and reduce improper payments.